Hiring Professional Help

Hiring Professional Help

Now that I've sent your head spinning with all the paperwork required to get your eBay business off the ground, let me tell you how to make most of these details go away:

Hire someone to do it for you.

That's right, when it comes to setting up and managing a small business, there is a definite advantage to hiring professionals to handle all the paperwork and record keeping. Yes, it's an additional cost you'll have to pay, but for most of us it's not only worth it ”it's a necessity.

What kinds of professionals am I talking about? Just two: an accountant and an attorney. The attorney is necessary to help you get your business registered and legal, while the accountant is necessary to keep track of your taxes and finances on an ongoing basis. While you might be able to do all this work yourself (or not), a professional is more likely to know what's required, and thus keep you out of any potential hot water. Professionals also do this for a living, so they can do it better and faster than you can. Let the professionals handle all this busy work ”so you can focus your attention on the important job of running your business!

Learn more about hiring an accountant and setting up your business's accounting in Chapter 6, "Step Four: Set Up a Record-keeping System."

Chapter 6. Step Four: Set Up a Record-keeping System

In this chapter

• Why you need to keep good records

• Components of a bare-bones record-keeping system

• Setting up an accounting system

When you're running a business, you need to keep track of what you're doing. That means keeping records about what you sell, who you sell it to, and how much money you make (or don't) from what you sell. These records not only help you manage your business on a day-to-day basis, they also help you prepare your yearly taxes.

This chapter walks you through the records you need to keep, and suggests how to set up your own recordkeeping system.

Why You Need to Keep Good Records

How profitable is your business? You'll never know if you're not keeping track ”which is reason enough to set up some sort of recordkeeping system.

Keeping records can be both a defensive and an offensive (in a good way) activity. It's defensive in that you have key information about your business in case you ever need it in the future ”to answer a query from the IRS, to investigate a customer complaint, or to notify customers in the case of a product recall. It's offensive in that you can use this information to generate more sales, by selling additional items to your existing customer base.

And then there's that matter of tracking the progress of your business.

You need to know how much things cost and how much you sell them for in order to gauge the success of your business. If nothing else, you have to report your business income to the Internal Revenue Service at the end of each year, and you can't do that if you don't know what you've sold, and for how much. The more detailed and accurate your record-keeping , the easier it is to put together your yearly tax returns ”and to claim all the allowable deductions against your income.

In addition, setting up a simple accounting system lets you generate monthly financials, which tell you on a near-real-time basis just how well your business is (or isn't) doing. After all, you don't want to wait until the end of the year to find out that you're going broke ”or getting rich!